LAHORE: Pakistan’s long-awaited new auto policy is almost complete and will be launched very soon, Special Assistant to the Prime Minister Haroon Akhtar Khan has said, adding that its central aim is to make cars more affordable for consumers and that all additional customs and regulatory duties will be abolished under it.
Speaking on a private TV channel’s show, Haroon Akhtar said the policy is in its final stage, with work currently under way on the legal side.
Haroon Akhtar acknowledged that the policy had been delayed and set out the reasons. The previous two auto policies had increased competition in the sector, he said. Where there were once only three manufacturers, there are now 13.
The biggest change in the industry, he said, has been the arrival of electric vehicles, which needed to be facilitated through the new framework. The introduction of the National Tariff Policy also had to be taken into account.
There was extensive debate over the policy, which took time, he said, but the government wanted to make sure past mistakes were not repeated.
The key objective of the new auto policy, Haroon Akhtar said, is that consumers get vehicles at lower prices. He said the policy strikes a balance that would allow Pakistani vehicles to compete with the rest of the world.
Under the new auto policy, all additional customs duties and regulatory duties will be eliminated, he said.
The Automotive and Auto Parts Manufacturing Policy 2026-31 has received the prime minister’s approval and is being forwarded to the International Monetary Fund for review, Dawn reported this week, noting that stakeholders still differ over incentives for various segments of the industry. Its reported priorities include promoting electric vehicles across all categories for environmental and fuel-saving benefits.
The reference to legal work is consistent with reports that the draft will go through legal vetting before formal announcement.
Pakistan’s vehicle prices have long been among the highest in the region relative to incomes, partly because of layered import taxes that protect local assemblers. Under the National Tariff Policy, the government has committed to simplifying customs duty slabs and phasing out additional customs and regulatory duties across the economy.
Under its $7 billion Extended Fund Facility with the IMF, Pakistan has also committed not to impose new regulatory duties on imports. Earlier this year, disagreement within government over how quickly to cut maximum tariff rates was reported to be a key reason for the delay in finalising the auto policy.
The removal of additional duties could narrow the gap between local and international prices, particularly if competition among the 13 manufacturers intensifies. For local assemblers, the challenge will be to increase localisation and efficiency as tariff protection falls.
The emphasis on electric vehicles also ties in with the government’s wider concern over fuel imports, which has sharpened this year as disruption to Gulf oil routes pushed up petrol prices.
Haroon Akhtar did not give a specific launch date but said the policy would be issued very soon.
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